As you move on to higher education, choosing the best student bank account for your needs is an important step. While many people simply stick with the bank they used as a child, moving to the student version of their existing current and savings accounts, it pays to compare what other accounts are available and the benefits they can offer.
Before opening a student account, you should carefully consider where you are going to store your tuition and/or maintenance loans, what you can expect in terms of arranged and unarranged overdrafts, and any perks or extra features you could receive.
Getting your finances in order is important if you are going to make sure you don't finish your studies with large debts that will take years to pay off. In this article, we look at the features you should be looking for from your student bank account and compare some of the best student bank accounts for the 2023/24 academic year.
What is a student bank account?
A student bank account is a special account for those in higher education such as university. Most will offer better overdraft and interest rates than regular accounts and can come with additional incentives, such as free railcards.
However, you need to be aware that banks are not charitable institutions and they know that at the end of your education you will probably still have outstanding overdraft debt and will, therefore, remain with that bank in the future.
The cost of studying is high and the use of an overdraft facility provides a useful safety net but make sure you also maximise your income by taking up some part-time work, particularly during the long holidays, to tide you over in the gaps between your loan instalments.
What do I need to open a student bank account?
To open a student bank account you will need proof of identification - typically a passport or driving licence - and proof of your address. In addition, you will need to show you are eligible for a student account with at least one of the following:
- A UCAS confirmation with an unconditional offer
- A letter showing a conditional offer and proof of A-level results that meet that requirement
- A confirmation letter from the university you will be attending
How to choose the best student account
- Overdraft facility: A fee-free overdraft is often the main attraction of a student bank account. Something to watch out for is whether the overdraft that is advertised is what you will actually be offered. Some will be "up to" a certain level, while others offer a guaranteed amount.
- Perks and freebies: Some bank accounts will offer cash for signing up or a rail card for discounted travel. It's important to consider how these offers stack up against the other features of the account, particularly the overdraft facility. It's almost always better to opt for an account with preferential overdraft arrangements.
- Ease of use: Gone are the days of being tied to a bank with a local branch. A key feature now for any current account is whether it offers good online banking and/or a banking app that allows you to manage your account remotely.
The best student bank accounts
Student bank accounts come with a wide range of overdraft facilities, perks, and unique features. Understanding these will help you to choose the right account for you.
|Arranged Overdraft Cap
|Unarranged Overdraft Rate
|123 Student Current Account
|£1,500 in years 1-3, £1,800 in year 4, £2,000 in year 5
|Free 4-year 16-25 railcard to save 1/3 on rail travel. Earn cashback and rewards with Santander Boost
|Frequent domestic travellers or those making regular long commutes
|Student Bank Account
|£1,000 in year 1, £2,000 in year 2, £3,000 in year 3
|Access to 5.00% savings account
|Those looking to save
|FlexStudent Current Account
|£1,000 in year 1, £2,000 in year 2, £3,000 in year 3
|Access to Flex Instant Saver with 3.25% interest
|Those looking for an interest-free overdraft
|Student Additions Account
|£500 in first academic term, £1,000 in year 1, £1,500 in year 2 and beyond
|Saving and budgeting features within the app
|Those looking to budget and save
|Student Current Account
|£1,500 in years 1-3, £2,000 in years 4-6
|Up to 15% cashback with some retailers. Earn 2.00% interest on account balance (limits apply).
|Earning interest on your current account balance
|Student Bank Account
|£2,000 (£500 in the first academic term), Up to £3,250 from year 3 onwards
|Free 4-year Tastecard
|Frequent diners and cinemagoers with Tastecard's 2-for-1 deals or up to 50% off thousands of UK restaurants plus cinema discounts
^Qualifying terms may apply
Santander - 123 Student Current Account
- Must be 18 or over and living in the UK permanently
- A fee-free arranged overdraft cap of up to £1,500 in years 1-3, £1,800 in year 4, and £2,000 in year 5
- A free 4-year 16-25 railcard to save 1/3 on rail travel fares across the UK
- Up to £300 ATM withdrawal per day
- Cashback and rewards with Santander Boosts
- Must pay in a minimum of £500 every 4 months
HSBC - Student Bank Account
- Must be 18 or over and a resident in the UK for at least 3 years
- Must provide proof of your course place
- A fee-free arranged overdraft cap of up to £1,000 in year 1, £2,000 in year 2, and £3,000 in year 3
- Access to 5.00% Regular Saver
- Balance After Bills tool to see how much money you have left after bills and other regular outgoings
Nationwide - FlexStudent Current Account
- Must be aged 18 or over and a UK resident for 3 or more years
- A fee-free arranged overdraft of up to £1,000 in year 1, £2,000 in year 2, and £3,000 in year 3 and beyond
- Fee-free international banking and transactions
- Contactless payments plus Apple Pay, Google Pay or Samsung Pay
- Must pay in at least £500 per term from the date the account is opened
- Access to Flex Instant Saver with 3.25% interest
Barclays - Student Additions Account
- Must be aged 18 or over and a UK resident for at least 3 years
- A fee-free arranged overdraft cap of up to £500 in the first academic term, £1,000 in year 1, £1,500 in year 2 and beyond
- Contactless and Apple Pay
- Use the app to save, budget and monitor your income
Lloyds Bank - Student Current Account
- Must be aged 17 or over and have been a resident in the UK for at least 3 years
- Must be studying on a full-time course for a minimum of 2 years or a one-year full-time access course leading to a degree
- A fee-free arranged overdraft cap of up to £1,500 in years 1-3 (limited to £500 for first 6 months and £1,000 months 7-9) and £2,000 in years 4-6
- Up to 15% cashback and Save the Change round-up function
- Contactless, Apple Pay and Google Pay
- Earn up to 2.00% interest on current account balance
NatWest - Student Bank Account
- Free 4-year tastecard
- Must be aged 17 or over and a resident in the UK for at least 3 years
- Must use your student account as your main account
- A fee-free arranged overdraft cap of up to £2,000 (£500 in first academic term)
- Up to £250 ATM withdrawal per day
- Has a pause function if you cannot find your card, rather than having to cancel it altogether
Tips for managing your money as a student
Budget, budget, budget
Create a budget before you leave home so that you fully understand your likely income and expenses at university or college. Check out our article "The best budgeting apps in the UK - how to budget without trying" or our money tip #73 to learn how to start ‘big picture’ budgeting.
Additional money-saving tips can be found in our article, 'How to save money as a student'.
Be responsible with your overdraft
Having access to a fee-free overdraft can be a great failsafe, but try to only use it in emergencies, as it is actually a debt and can become a bad money habit. Head to MTTM's podcast episode 282 to find out how to clear your overdraft if you find yourself stuck.
Check the small print
With any student account, you need to make sure you are aware of any additional charges, such as foreign currency transaction fees. Pay close attention to the small print of your contract, as you could end up with hefty fees after your post-exam holidays, and check if there are any limits to how often you can dip into an unarranged overdraft. These things are not necessarily clear without reading your account's terms and conditions.
Move onto a graduate account
It can also be worth considering moving to a graduate account with your provider when you finish your course, as it will typically give you a longer interest-free period to pay off the overdraft you may have accrued during your undergraduate studies, and graduate accounts typically have very generous overdraft limits too.
Check your credit score
You should check your credit rating before applying for any new bank account to make sure your application has the best chance of success. Check out our article "What is a credit score and how do you check it?" for more details and how to go about it.
Make the most of your money
Finally, before you leave the nest, head to our advice on "7 ways to get the most out of your money at university" to set yourself up for a fun - and financially secure - stint in higher education.